PAY DOWN THE DEBT!

August 11, 2009

If taxpayers knew that the U.S. Treasury was sitting on $80 billion dollars that could be used to pay down the gigantic federal debt, they would not be pleased. If they knew that Treasury Secretary Timothy Geithner is bound by law to pay down that debt but has not done so, they would be furious, says Sen. Sam Brownback (R- Kansas), Ranking Republican on the Joint Economic Committee.

The $80 billion is the amount that has been repaid by banks that were the recipients of the giant $700 billion federal bailout of the financial industry last October.

Leading the way have been the major banks, many of which received shovelfuls of taxpayer money in the form of the Troubled Assets Relief Program (TARP).

However, the promise to make the taxpayer whole has not been fulfilled.

There's only one way to insure that this money goes to repay taxpayers, he continues: pass a law that forces Treasury to use the proceeds to pay off a portion of the nation's debt every time it receives a payback of TARP money from recipients. His bill, the Save American Free Enterprise Act (SAFE Act), could do just that.

Under the bill:

The Treasury would be required to pay down the federal debt and follow through on the requirements of the original financial bailout legislation.

At the end of each month, SAFE requires Treasury to reduce the debt limit by the amount of any repayments, dividends and interest, warrant sales or other proceeds from the sale of assets received during that month.

Doing anything less than requiring Treasury to pay taxpayers back for bailing out Wall Street would not only be irresponsible, it would invite yet more unauthorized, counter-productive economic intervention, says Brownback.

Source: Sam Brownback, "Sen. Sam Brownback has a message to Treasury: Pay down the debt!" Washington Examiner, August 10, 2009.